Issue Area 1: The Cost of Insurance Plans are not Equitably
Apportioned Among Participants.By law (§5-16-5), the PEIA Finance Board is required to apportion
necessary insurance costs equitably among participating employers, employees,
retired employees, and providers of health care services. However, the
PEIA Finance Board has primarily relied upon employers and providers to
pay an inequitable amount of rising plan costs. In addition to employers
paying 88% to 93% of the premiums for its active employees which is high
compared to the national average, State and local employers also contribute
funds for the costs of State and local retirees by paying premiums in excess
of the amount necessary for their active employees. Employers' contribution
for retirees is between 60% and 70% of the retirees' insurance costs. This
employer contribution for retirees is growing three times faster than the
growth of employers' total contributions for both retirees and employees,
while retirees have gone several years without any changes in their premium
payment. However, these costs do not include the cost incurred by providers
in the form of contractual allowances that pay providers less than
their actual costs. Providers have been used to consume the inflationary
medical costs by reducing reimbursement rates. Rather
than a proportional increase in retiree and employee premiums in relation
to each groups' costs, the Board has depended on providers and employers
to absorb medical cost increases.

Issue Area 2: The PEIA
Finance Board actively participates in meetings.The Finance Board meets quarterly and
with a quorum as required by law (§5-16-5). The Board has almost perfect
attendance for every meeting and have always met with a quorum. The board
members take their responsibility seriously and actively represent their
interest groups in the development, implementation and approval of financial
plans.